In Perfect Competition,the Assumption of Easy Entry and Exit Implies

question 64

Multiple Choice

In perfect competition,the assumption of easy entry and exit implies that,in the _____ run,all firms in the industry will earn _____ economic profits.

• A)long;zero
• B)short;positive
• C)short;zero
• D)long;positive

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Definitions:

Economic Values

The worth of goods or services determined by their utility and scarcity in relation to consumer demand.

Annuities

Financial products that pay out a fixed stream of payments to an individual, typically used as part of retirement planning.

Compounded Semi-Annually

An interest calculation method where interest is added to the principal sum of a deposit or loan at mid-year and end-of-year, resulting in interest earning interest.

Guaranteed Contract

An agreement ensuring certain terms are fulfilled, often used in the context of employment contracts guaranteeing payment.